The National Council of La Raza said its board of directors voted unanimously to pull the conference after being unable to reach an agreement with Mayor Mark Funkhouser over his appointment in June of Frances Semler, a member of the Minutemen Civil Defense Corps.

"Our decision is a clear expression of support for Kansas City's Hispanic community," said board chairwoman Monica Lozano. "An active member of the Minutemen should not be an official representative for a city that purports to believe in diversity."

NCLR officials consider the Minutemen, who are known for posting sometimes armed patrols on the Mexican border and picketing construction sites where illegal immigrants may be working, hostile to Hispanics. The Arizona-based organization maintains it simply wants U.S. immigration policies enforced.

Funkhouser, who has stood by Semler throughout the controversy, declined to comment Saturday afternoon on the group's decision, saying he was abiding by an agreement he reached with local Hispanic leaders during a federally mediated session Friday.

The NCLR and local groups had urged Funkhouser to force Semler to step down from the park board. Last week, NCLR said the it would still hold the conference in Kansas City if Semler agreed to at least cut her ties to the Minutemen.

But Funkhouser and Semler refused both demands. Semler and the Minutemen have said her political views have nothing to do with her service on the park board.

Janet Murguia, the NCLR's president and a Kansas City, Kan., native, said she was saddened not to bring the annual meeting to her hometown and felt Funkhouser "completely misunderstood this situation."

"The mayor has failed to take direct action and we hold him fully accountable," Murguia said.

Losing the 2009 convention is expected to cost the local economy in Kansas City an estimated $5 million to $7 million in revenue.

It's unknown whether the NCLR's decision will lead the NAACP to move its own convention from Kansas City in 2010, which officials estimated would cost the city another $9 million in lost sales.

NAACP officials have also criticized Semler's appointment and said they would consider NCLR's decision in their own deliberations.

Local economic development officials have also worried that the withdrawal could lead other groups to boycott the city.

A federal mediator met Friday to try to help reconcile Funkhouser and local Hispanic leaders at the urging off U.S. Rep. Emanuel Cleaver, a Kansas City Democrat.

After two hours of talk with the leaders at an area church, Funkhouser and the mediator, Pascual G. Marquez, regional director of the Community Relations Service, and made no comment.

Marquez said federal law prohibited him from discussing his efforts, while Funkhouser continued his policy of not publicly commenting on the controversy.

The half-dozen Hispanic leaders met for an additional 30 minutes by themselves but they also said they could not comment.